Michelle Ice City "out of the circle" joins the "brand wars" and winds up inside the
"siege" of milk tea
At two o'clock in the afternoon on July 11, a light rain began to fall in Zhengzhou.
The outdoor is deserted, and the 16th floor of Hanhai Beijin Commercial Center is extremely lively.
This is the headquarters of Michelle Ice City Co., Ltd. (hereinafter referred to as Michelle Ice City) ice cream and tea chain.
On the two monitors at the entrance of the company, the recent "brainwashing" divine tune is being played cyclically: You love me, I love you, Michelle Ice City is sweet.
"Did not pass".
On the same day, the Beijing News Shell Finance reporter came to the Zhengzhou headquarters of Michelle Ice City. Nearly 30 potential franchisees from all over the country sat side by side in the interview waiting area.
Some staff members said, "Hundreds of people come for interviews every day."
The reporter visited and learned that the Zhengzhou headquarters undertakes most of the preliminary work for the franchise of Michelle Ice City. From franchise introduction and screening to collective exchanges and classes, interested parties flock to them, but most of them are broken after "passing five barriers and killing six generals". .
According to company insiders, the initial pass rate of Michelle Ice City franchisees is within 10%.
"More excited than the college entrance examination", Deng Long (pseudonym) who came for interviews always heard that someone had failed to join the audit, and began to keep inquiring about the audit standards of Michelle Ice City.
1 Get together at the headquarters and join the "Scramble"
Michelle Ice City has a whole set of processes to join: project consultation, application submission, interview, store review, signing, decoration, training, opening, several links are set up, and they have also become layers of barriers.
On the afternoon of July 11, the Shell Finance reporter came to Michelle’s Zhengzhou headquarters. Intentional franchisees from Anhui, Zhejiang, Jiangsu, Fujian and other places were waiting for interviews.
According to regulations, after submitting an online shop application, Michelle Ice City employees will review it within 7 working days, and an interview can be reserved only after the review is passed.
On that day, many people, like reporters, did not apply in advance, so naturally they could not see the interviewer.
Under the guidance of the staff, the reporter filled out a questionnaire, and then listened to the staff briefly introduced the joining process with nearly 10 other interested franchisees.
The staff member said that there are limited daily interview places at the headquarters. Whether you can enter the interview and when you can participate in the interview depends on whether the intended franchisee meets the interview conditions and the number of interview appointments.
"If the interview appointments are full, we can only push back" "Hundreds of people come every day."
Deng Long arranged for an interview in advance, and before coming to Zhengzhou, he filled in his detailed information online, including the city where the store was opened, the planned investment amount, who managed the store, and whether the funds were borrowed or not.
From time to time, the interviewer went to the lobby and called the interviewer to come in.
Two conference tables in a conference room separate people inside and outside the company.
"Just asked some questions during the review, how much do you plan to open a store, and your previous work experience." A young man who had just finished the interview walked out of the room and held a card with the "Snow King" logo on the cover. This will be the next day. Enter the admission ticket for the collective franchise explanation.
Joining explanations also need to line up, "It may not be possible to queue up to the morning session, or the afternoon session."
During the visit, Shell Finance reporter learned that Michelle Ice City reviews the qualifications of franchisees in the three stages of "submitting application, participating in interviews, and reviewing stores" before the signing of the franchise. Some people will fail at any time.
Among them, after participating in the collective franchise explanation, Michelle Ice City will also send a "test paper" to the intentional franchisees, and what is tested is the content of the explanation.
"failed".
An intentional franchisee from Henan told the Shell Finance reporter that Michelle’s current franchise policy in Henan is already very strict. “If it’s places like Xinjiang, Qinghai, and Anhui, it’s easy to pass because Henan is too saturated.” .
In his opinion, "(threshold) cannot figure out."
"I conclude, the main reason is that you have certain strength and the conditions are just the best. You must also have experience, be able to operate on your own, and the area should not be too saturated," said a franchisee who has obtained the qualification to open a store in Michelle.
After passing the two levels, Deng Long rushed to the airport to go home.
Along the way, he kept sending messages to the bosses who went to the interview to learn about each other's joining dynamics.
2 Starting from opening a store of 350,000 yuan, incubating training and raw material business
In Wen County, Jiaozuo, about 80 kilometers west of Zhengzhou City, the joining of Michelle Ice City has nourished a lot of business, and the traces are not hard to find.
In 2012, Michelle Ice City established Henan Dajia Food Co., Ltd. in Wen County, Jiaozuo, as a raw material production base.
On the side, is the logistics and warehousing base of Michelle Ice City-Shangdao Smart Supply Chain Co., Ltd. The Michelle Ice City Business School within the company has become an important place for franchisees to train.
"Today, there were three Everbright buses coming from Zhengzhou." On July 12, the small fast food stall at the door of Shangdao Smart Supply Chain Co., Ltd. had been in business for many years. The boss told the Shell Finance reporter that his main business was here. Consumers are franchisees and logistics company staff.
"After joining, we must come to train every year, and we will change a group of people within a week."
The reporter visited and found that whether it was hotels in the county or the surrounding industrial parks, most of them used "reporting Michelle Ice City to give discounts" to attract customers.
Local taxi drivers will also stay at the gate of the Michelle Ice City factory, waiting for business to come to the door.
"There are hundreds of trainees in each session, many of whom live in the county." "The training is usually a week. Basically, it starts from the county at 7:30 in the morning and ends at 5 in the afternoon. We waited there 10 minutes in advance. "A taxi driver in Wen County told reporters.
"There are more than 400 people in the highest peak group", "On the day of the make-up exam, our company had 100 taxis, and there were 30 or 40 taxis (to pick up people)."
The security guard of Shangdao Smart Supply Chain Co., Ltd. told reporters that the Michelle Bingcheng Business School can provide accommodation for about 100 people, but this is only one-third of the total number of trainees in each period.
The Shell Finance reporter learned that if you are training at Michelle Bingcheng Business School, if you stay and eat inside, you need to pay extra.
In fact, the joining process of Michelle Ice City is far more complicated than it looks.
After attending the interview, passing the review, and getting the qualification to open a store, Michelle Ice City staff also need to review the location of the franchisee's plan to open a store, and only after passing it can the contract and payment be made with Michelle Ice City.
After that, the decoration team contracted by Michelle Ice City entered the venue for decoration, and the boss needed to bring his employees to Wen County for training.
For Deng Long, who wants to join Michelle Ice City, the initial fee is not low.
According to the staff of Michelle Ice City, the cost of opening a store starts at 350,000 yuan.
There are a series of charging standards in the franchise fee list: the provincial capital city franchise fee is 11,000 yuan/year, the security deposit is 10,000 yuan, the brand management fee is 4,800 yuan/year, the production process and other consulting services are provided in the later stage, and the need for store opening is 2,000 yuan/year. The equipment costs 80,000 yuan, the first batch of raw materials needed is 60,000 yuan, the decoration budget is 80,000 yuan, and the rent and transfer fees start from 100,000 yuan.
In comparison, the franchise fees for prefecture-level cities and county-level cities are 9,000 yuan/year and 7,000 yuan/year respectively, and there is no difference in other fees.
In fact, the biggest source of income for Michelle Ice City is not franchise fees.
Michelle Ice City once disclosed its revenue of 6.5 billion yuan in 2019.
According to the Michelle Ice City charging standard, the initial fee, management fee, and consulting service fee are paid once a year.
If each merchant pays the total of three fees of 15,000 yuan, 10,000 stores will only charge 150 million yuan.
For it, the real long-term business is the raw material business.
The staff told reporters that all the raw materials in the franchise stores need to be purchased from Michelle Ice City.
The first batch of required raw materials is priced at 60,000 yuan, and some stores can be used up in one month.
Every time you apply for delivery of raw materials, as long as the total amount exceeds 8,000 yuan, the delivery fee can be waived, "this is easy to achieve".
3 Expansion of milk tea territory: not bad for money?
Michelle Bingcheng is out of the circle, just a shadow of the milk tea fanaticism.
The franchise of Michelle Ice City is mainly a single store, and the franchisee is required to operate as a sole proprietorship, and the company does not participate in the sharing.
Under this model, the stores expanded rapidly, and now the number of stores has been refreshed to 15,000.
3 yuan for ice cream, 4 yuan for lemonade, 6 yuan for milk tea... While being labelled as "good quality and low price", Michelle Ice City has captured a group of young consumers.
According to statistics, Michelle Ice City has surpassed Naixue's tea to become China's second largest milk tea brand after Hi Tea.
For this hot spot, the brand has opened a racetrack.
At the beginning of April, the "Tea Yanyue Color" pop-up store opened in Wenheyou, Shenzhen. On the first day of opening, there were modern queues, purchases, and even "cross-city reselling".
By June 30, Nayuki's tea was the first to land on the Hong Kong Stock Exchange and became the "first share of tea in the world."
However, under the halo but the stock price did not create a surprise, it fell below the issue price at the opening and closed by 13.54% on the first day.
As of July 13, the stock price was HK$16.26/share, which still did not exceed the issue price of HK$19.8/share.
Undoubtedly, the current tea drinks have already taken the lead, and this industry also has a "chain of contempt" in the eyes of buyers.
Naixue, Heycha, and Lelecha with a unit price of more than 30 yuan are the first echelon well-deserved, and a little bit less than 20 yuan, CoCo, Tea Yanyue Se, Shuyi Burning Grass, etc. are considered mid-range brands.
In contrast, Volkswagen brands headed by Michelle Ice City have also been capitalizing frequently recently, attracting fans.
The Shell Finance reporter combed and saw that Michelle Bingcheng and Hey Tea had both reported listing news.
On June 24, a media report stated that “The latest round of financing for Hey Tea is about to be finalized. After multiple confirmations, the investors in this round of Hey Tea are all old shareholders. The financing process lasted for several months, and the valuation reached an unprecedented 60 billion yuan. Yuan, once again set a new financing record for China’s new tea drinks."
The valuation of 60 billion yuan is staggering, and the details of Hey Tea's financing are also intriguing. "The financing process lasts for several months." "The competition between various institutions is very fierce. Various trustee relationships want to get some share from it. To be able to get on the bus is to hurry up, for fear of changes." "No new shareholder can squeeze in"...
In addition, in January this year, Michelle Bingcheng denied the news of 2 billion financing to Shell Finance reporters, but the other party also told reporters: "In recent years, the tea industry has attracted much attention, so there are indeed many well-known investment institutions or investments. People express their willingness to invest to us, and we are currently not considering accepting investment from the capital side."
On July 11, the Shell Finance reporter visited the headquarters of Michelle Ice City. According to the staff responsible for the franchise introduction, franchising milk tea is definitely a good business.
"We provide raw materials uniformly, follow our normal cooking standards and product ratios to achieve uniformity of products and the same taste, then your gross profit can be stably controlled at 55%-60%" "As for net profit , You need to deduct your rent, labor, water and electricity and other miscellaneous expenses before calculating separately. Most Michelle Ice City stores can achieve a comprehensive net profit of about 30%. If some stores have very low rent and labor costs, The net profit may be a little higher than 30%." The staff member said.
The reporter noticed that Cha Yanyue Se claimed that its gross profit could reach 75%, and that a 50-square-meter store in a provincial capital city could have an annual net profit of more than 1.5 million yuan.
4 The nation's "advanced", tea-drinking rivers and lakes are trapped inside
Before entering the tea industry, Heytea founder Nie Yunchen did a lot of analysis and finally settled on the chess piece. “This (the tea industry) is relatively easy to do. It has an entry point and has a wide range of consumer groups. I think it’s very demanding and high-frequency. Even if there is no hi tea, the market for tea drinks is huge. Some unknown milk tea shops will line up in front of the door from time to time."
If the demand is real, the market will open up accordingly, and merchants will have a lot of profits.
According to the company's data, there are 327,000 milk tea-related companies (including self-employed individuals) in operation/existing in my country.
In the past ten years, there have been 85 investment and financing events for tea brands, and the total amount of disclosed financing reached 8.832 billion yuan.
Among them, after 2016, tea brand investment and financing activities began to be frequent, there were 10 tea brand investment and financing incidents that year, 12 in 2020, and 14 in 2021 (as of June 30).
Judging from the financing trends of tea brands in the past decade, brands that focused on freshly squeezed and hand-made in the early years were easy to obtain financing. With the rise of brands such as Hey Tea, mid-to-high-end tea brands are blooming everywhere.
In recent years, various market-segment tea brands with healthy, high-end, and commercial brands have been favored by investors.
In addition, tea brands with raw materials such as brown sugar drinks, mango drinks, and cherry drinks have begun to enter the market.
Capital has been injected one after another, and tea companies with sufficient "ammunition" to open stores "competition" press the quick button.
At the end of 2017, Naixue's tea began to go out of the Guangdong region and expand across the country, officially launching the "National Urban Expansion Plan".
At present, Nai Xue has 556 tea and tea shops, and plans to open about 300 and 350 tea shops in first-tier cities and new first-tier cities in 2021 and 2022, respectively, of which about 70% will be planned as Nai Snow PRO tea shop.
In contrast, Hi Tea currently has over 800 stores nationwide.
The Shell Finance reporter learned that in recent years, many regional tea shops have been upgrading their brands to open up their “ambitions” to expand nationwide.
China’s ready-made tea market has a huge consumer group and is growing rapidly.
In terms of retail consumption value, the total market size of China's current tea drinks in 2020 is about 113.6 billion yuan, and it is expected to reach 340 billion yuan by 2025, with a compound annual growth rate of 24.5%.
In the face of the huge market size, tea drinks are all over the world.
"Operational capabilities, supply chain, and R&D capabilities have become the moat for the new tea brand." An insider told the Shell Finance reporter.
"Young people nowadays are willing to try unknown brands, and they like to pay for those that look beautiful." Mo Mo (a pseudonym), a milk tea practitioner, told Shell Finance reporter, "This is why tea brands promote products through various forms. Improve the value of appearance, so as long as the new brand comes out as long as the taste is good and the value is good, when the price is cheap when it first comes out, some people will buy it."
The Shell Finance reporter noticed that, compared to a single rude marketing, tea drinking companies began to compete in fancy, hiring traffic stars, telling good business stories, making high-value packaging, launching new products on festivals, launching brainwashing divine songs... …
Some netizens complained that milk tea is not drunk every day, "You love me, I love you, Michelle Ice City is sweet" are all carved into DNA...Unexpectedly, Michelle Ice City's brainwashing fever has not faded, 1 week Earlier, CoCo Milk Tea launched a song-to-earphone activity.
In all CoCo offline stores in 10 cities, including Beijing and Shanghai, you will receive a surprise reply from the CoCo store manager and limited drink discounts by shouting the song order code. If you trigger a hidden egg, you may also get headphones.
Not only that, but the packaging design of tea companies is even more intense. You have "Walden Blue" and I have "Glacier Strange Travel"... The pace of joint names has never stopped, and the speed of new product changes has spawned " "Milk tea + all things" is constantly opening the door to a new world for consumers.
The reporter noticed that Hey Tea's Huangpi Xianlu was on the market. Before the regional niche fruit yellow peel was introduced to the whole country, Hey Tea had already launched spring citrus, oil tangerine, and perfume lemon.
Behind the frequent launch of new products, the test is the research and development capabilities, supply chain strength, and store network scale of tea companies.
It is reported that in order to solve the problem of instability in the supply of niche fruits due to geographical characteristics, Hey Tea has adopted the solution of joint construction of bases.
Nayuki’s Tea also mentioned that 70% of the funds raised in the IPO should be used to support the expansion of the company’s tea shop network and increase market penetration; about 10% will be used to further enhance the company’s overall operations by strengthening technical capabilities. Improve operational efficiency; about 10% is used to improve the company's supply chain capabilities to support the company's scale expansion.
■ Behind the boom
Chaos: Pseudo-platform recommends "small brands"
On July 11, when the staff of Michelle Ice City headquarters explained the franchise matters, people kept asking questions on the spot: how can we approve the franchise, what is the profit margin, and what is the protection policy for the store opening area?
In fact, many people have already had an in-depth understanding of franchised brands in the milk tea market.
"A little bit is too expensive," Chen Xun (pseudonym), who also plans to open a milk tea shop, told reporters that the cost of opening a shop is also high, and Gu Ming's review is relatively difficult. "You can only join open places."
The reporter noted that some franchise brands also put forward requirements on the degree and age of franchisees.
Among them, the official website of "Shu Yi Shao Xian Cao", a more developed brand in the Southwest area, requires an age between 20-40 and a college degree or above.
In addition, most brands will require franchisees to run stores full-time.
When joining, the brand will also require that other competing products cannot be joined at the same time.
It is worth mentioning that under the craze for joining milk tea brands and the high threshold, many people have also been chaotically "cutting leeks."
The Shell Finance reporter searched and found that although Heycha and Naixue’s tea are both directly-operated brands and do not accept franchising, there are many websites on the Internet with the headings "Joint Hey Tea Official Website" and "Naixue's Tea Affiliate".
Searching for "a little bit of franchise", "CoCo franchise", "Michelle ice city franchise" and other keywords can also search for many pseudo-platforms.
After the Shell Finance reporter filled in the mobile phone number on a website, a regional manager who claimed to be joining a certain brand called.
However, during the communication, the reporter "persuaded" reporters to join some well-known brands, and strongly recommended a milk tea brand that claims to be co-created with a variety show, and said that as long as joining the brand, the photos of the well-known host of the variety show can be used in the store. , "Brand and IP two-way drainage."
In May of this year, a brand of milk tea Zhilan endorsed by actress Ma Yili was investigated by the public security authorities for suspected fraud.
The brand's routine franchise fraud case involved up to 700 million yuan.
As for the gameplay, it is mainly to open a store in prime locations in some first-tier cities and hire more than 100 people to queue up to buy milk tea every day, creating the illusion of popularity.
After attracting franchisees, they delay the location of stores, look at the map to randomly select locations, raise the purchase price for decoration, and supply raw materials with shoddy materials, which directly leads to a large number of franchise stores' poor operation or even closure.
"Cost 1.2 yuan/cup", the industry urgently awaits standards
In the current milk tea industry, there is no uniform production standard, and it is not clear about the materials used, the sugar content, and the amount of caffeine.
On the outer packaging of freshly made milk tea, it is generally not marked with product ingredient information, nutritional information, etc.
The Shell Finance reporter found that the main raw material of most brands of milk tea is traditional non-dairy creamer, that is, creamer, and some brands have begun to use "special milk beverages" with stronger flavors.
In early July, the reporter saw on the e-commerce platform that a product of "Jinghua Non-dairy Creamer" produced by Shenzhen Yinuo Food Ingredients Co., Ltd. was priced at 14.4 yuan-21.12 yuan per kilogram.
According to the product introduction, every 2 liters of fragrant and mellow milk tea requires 260 grams of non-dairy creamer, plus 120 grams of white sugar and a 30 grams of black tea bag.
"The cost of a 500g cup is only 1.2 yuan/cup." A milk tea raw material supplier told reporters that most businesses in the market currently use this type of creamer, which has a strong flavor and low cost.
On July 12, the Shell Finance reporter randomly dialed the franchise stores of Cha Baidao, Michelle Ice City, Yihetang, and Xiaodian to find out whether the company's milk tea is made of fresh milk. Only a few products use fresh milk. .
"It's made with tea and milk powder," a staff member who also burns grass in a book told reporters that there are no products made from fresh milk in the store.
A staff member of the Tea Baidao also said that the store's milk tea is not made with fresh milk.
The Shell Finance reporter noted that some stores will use "special milk beverages" in some products. Most of these products are milky white liquids. The ingredients include hydrogenated vegetable oil, cream, whey powder, butter and so on.
In the eyes of the merchants, it can be described as the milk version of the "Zhongtangbao", which has also been labeled as "replacement of non-dairy creamer".
The price of 1 liter of "special milk" is less than 30 yuan. In the demonstration video of the merchant, only 70 grams are needed, plus different auxiliary materials, to make a cup of delicious milk tea.
Beijing News Shell Finance reporter Li Yunqi and Yan Xia